India ranks first among the top 10 countries with the largest share of low-cost carriers (LCCs) in total airline capacity. According to the latest data from global travel data provider OAG, LCCs in India, dominated by IndiGo, hold 71 per cent of the total seat capacity. This is higher than its nearest competitor, Indonesia, where LCCs control 64 per cent of the total airline seat capacity.
India’s LCC share is much higher than the global average of 34 percent, reported by OAG for 2024.
In contrast, China, one of the largest airline markets, remains dominated by traditional full-service carriers (FSCs), with LCCs holding just 12% market share. However, the UK market is almost evenly split, with LCCs holding a slight edge over traditional carriers, thanks to multiple LCCs such as Ryanair, easyJet and Wizz Air.
Countries with a higher share of LCC compared to FSC include Brazil in Latin America and Italy and Spain in Europe. Developed countries such as the United States, Germany and Japan remain predominantly served by FSC.
The growing importance of LCCs is evident in OAG data, which shows that the world’s top four airlines are LCCs: Southwest, Ryanair, IndiGo and easyJet.
Since 2019, LCCs have increased their global capacity share by 13 percent, while legacy carriers have yet to fully recover to their pre-pandemic levels of 2019.
In India, much of the success of low-cost airlines is due to the massive expansion of IndiGo. As of July this year, IndiGo controlled 62% of the domestic passenger market and dominated the low-cost airline sector with a 70.2% share, including Akasa and SpiceJet.
However, Indian airlines still face challenges in shoring up additional revenues, which include seat fees, food, special check-in, seat upgrades and additional baggage. The potential to increase these revenues in India appears limited.
IndiGo’s ancillary revenue accounted for 7.1 per cent of its total revenue in 2022 at $5.86 per traveller, ranking it 54th out of 64 airlines, according to CarTrawler, a provider of mobility and car rental solutions for the travel industry. In comparison, among the world’s top 10 low-cost airlines, Ryanair Group’s ancillary revenue accounted for 35.7 per cent of its total revenue, easyJet’s 33.9 per cent and Southwest’s 24.9 per cent. IndiGo lags behind in this regard.
First published: August 20, 2024 | 11:48 PM IS
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